Mumbai: Consumer Forum Reprimands Bank Of Baroda For Not Processing Bearer Cheque

The Mumbai suburban Additional District Consumer Dispute Redressal Commission has reprimanded Bank of Baroda (BoB) for its “high-handed behaviour” in rejecting a senior citizen's bearer cheque, which his son tried to encash during the first Covid wave.

The commission found the bank guilty of providing deficient services and ordered it to pay Rs10,000 as compensation for the mental agony caused to the complainant along with Rs5,000 for litigation costs.

The incident occurred on May 29, 2020, when Vaikhunt Nayak, a resident of Tilak Nagar, Chembur, issued a bearer cheque of Rs10,000, which was to be encashed by his son, Advocate Prashant Nayak. However, the bankers refused to process the cheque even when the latter produced his Aadhaar card for identification. They insisted that the account holder, Vaikhunt, personally visit the bank to withdraw the money despite the pandemic risk.

The complainant argued that the bank’s actions were in direct violation of the Reserve Bank of India’s (RBI) master circular, which specifies that banks should not ordinarily insist on the presence of the account holder for cash withdrawals made via ‘self’ or ‘bearer’ cheques, provided appropriate identification is presented. However, the bank refused to accept the cheque even after having a word with Vaikhunt over the phone.

The commission said that “undue hardship” was imposed on the senior citizen and his son during a time of significant public health restrictions. It condemned the bank's conduct as not only unhelpful but also contrary to established banking norms. The commission’s order was passed ex-parte as no representative from Bank of Baroda appeared to defend the case.

Welcoming the decision, the advocate expressed dissatisfaction with the amount, deeming it insufficient given the two-year wait for justice. He indicated that they might consider appealing to the state commission for a higher compensation.